Investors rallied Apple shares to an all-time high Wednesday, pushing the tech behemoth’s market capitalization to nearly $1 trillion.
The surge in Apple’s stock, which ended the day up 5.9% to $201.50 per share, was driven by the company’s stellar results for the June 30 quarter, which topped Wall Street expectations. The run-up gives it a market cap of about $973 million (accounting for Apple’s share buyback in the quarter), putting the company within spitting distance of becoming the first U.S. corporation to hit the trillion-dollar milestone.
For the most recent quarter, iPhone sales surged 20% and Apple’s services unit — which includes iTunes, the App Store and Apple Music — posted a record $9.5 billion in sales, a 31% year-over-year increase. Overall, the Silicon Valley giant posted $53.3 billion in revenue for its fiscal third quarter of 2018 (up 17%) and net income of $11.52 billion (up 32%).
Apple investors also reacted enthusiastically to the company’s forecast for another sales beat in the current quarter. For its fiscal 2018 Q4, Apple said it expects revenue between $60 billion and $62 billion — 14%-18% higher than the year-earlier quarter, and ahead of analyst projections.
In the June 30 quarter, Apple actually shipped only 1% more iPhone units than the year-earlier period, but the average sales price jumped from $606 last year to $724, reflecting sales of the high-end iPhone X (which starts at $999). According to CEO Tim Cook, the iPhone X was again the best-selling model during the quarter.
Analysts believe Apple will get more wind at its back with new products anticipated for the fall of 2018 (heading into the holiday-shopping season). “We continue to expect iPhones to refresh on-time in late September,” Guggenheim Securities analysts wrote in a research note, with a slate expected to include a larger-screen iPhone X Plus and an iPhone model priced from $749 that adds the iPhone X’s Face ID authentication features.
While it didn’t break out Apple Music numbers for the June 30 quarter, the music-streaming service’s revenue grew more than 50% on a year-over-year basis, Cook told analysts on the earnings call. He also said over 300 million users now pay for subscriptions through apps available on the App Store.
Also on the call, Cook talked about Apple’s move into premium entertainment, citing the tech company’s recent pact with Oprah Winfrey and alluding to its expected foray into subscription-video business with a slate of original TV shows.
“Cord cutting in our view is only going to accelerate,” he said.
— Janko Roettgers contributed to this report.